Why Reinstating Glass-Steagall Would Increase Risk

The transcript discusses the potential reintroduction of Glass-Steagall and its impact on major banks like JP Morgan and Wells Fargo. It explores the implications of separating commercial and investment banking, arguing that diversified revenue streams benefit investors. The conversation also touches on the Volcker Rule, suggesting a focus on trading revenue limits rather than activity type to manage financial risk.

Which bank is likely to be most affected by a return to Glass-Steagall?

• Bank of America

• Citibank

• JP Morgan

• Wells Fargo

What is the main argument against separating commercial and investment banking?

• It simplifies business models

• It attracts more investors

• It increases financial risk

• It reduces customer options

Why might a diversified revenue stream be beneficial for banks?

• It limits commercial banking services

• It focuses on investment banking

• It provides all financial products to customers

• It reduces complexity

What is a proposed modification to the Volcker Rule?

• Increase trading revenue to 20%

• Focus on proprietary trading

• Limit trading revenue to 10%

• Eliminate trading revenue limits

What was not a cause of the financial crisis according to the discussion?

• Investment banking

• Commercial banking

• Volcker Rule activities

• Proprietary trading